Flood Departments?

John Tierney has an interesting analysis of why Americans seem better able to handle fire than floods. In the early days of the Republic cities responded to the danger of fires in a two-fold manner: they started fire departments and their residents bought fire insurance.

But urbanites learned to protect themselves through two innovations Benjamin Franklin introduced to America. He started a fire department in Philadelphia, as well as its first fire insurance company. Other cities followed, often with the firefighters organized by insurance companies with a vested interest in encouraging public safety.

Their customers had a vested interest, too, because they had to pay higher premiums if they lived in homes or neighborhoods that were prone to fire. As fire insurance became a standard requirement for homeowners, they and their insurance companies kept pressure on politicians to finance firefighting and tighten building codes.

As a result, the risk of a fire leveling a city like New York is lower than ever. Although the number of fires has dropped so much that experts routinely advise cities to close firehouses, voters’ fondness for the stations makes local politicians loath to close any.

In other words, when residents had something at stake in lowering the risk of fire–the price of insurance premiums–they exerted greater pressure on authorities to set regulations that improved safety. But in areas prone to flooding and other hurricane damage, there isn’t the same pressure, because homeowners assume that the federal government will bail them out if trouble strikes.

Starting in the 1960’s, the federal government took over the business of insuring against floods. It offered subsidized insurance to people in flood-prone areas, encouraging seaside homes that never would have been built otherwise. Even at bargain rates, most people went without flood insurance – only about a third of the homes in New Orleans carried it.

People don’t bother to protect themselves because they figure – correctly – that if disaster strikes they’ll be reimbursed anyway by FEMA. It gives out money so freely that it has grown into one of the great vote-buying tools of the modern presidency. Bill Clinton set a record for declaring disasters, and then President Bush set the single-state spending record in Florida before last year’s election.

Now it’s New Orleans’s turn. Since Washington didn’t keep its promise to protect the city, the federal government should repair the damage and pay for a new flood-control system. But New Orleans and other coastal cities will never be safe if they go on relying on Washington for protection. Members of Congress will always have higher priorities than paying for levees in someone else’s state.

Were New Orleans homeowners forced to assume more of the risk from flooding, perhaps there would have been a better maintenance of the levees or better plans for a response to flooding.